Transport Technologies Rail Cluster Business Plan - · PDF fileTransport Technologies Rail...

Transport Technologies

Rail Cluster Business Plan 2005 –2008 April 2005

Transport Technologies Rail COG 3-Year Plan _____________________________________________________________

________________________________________________________________________ April 2005 of 27

Contents Contents .............................................................................................................................. 2 Executive Summary ............................................................................................................ 3 1 Vision Statement......................................................................................................... 3

1.1 Vision Discussion ............................................................................................... 3 1.2 The Vision Explained ......................................................................................... 3

2 Summary Cluster Analysis ......................................................................................... 3 2.1 Regional Industry Explained............................................................................... 3

2.1.1 Rolling Stock and Supporting Industries .................................................... 3 2.1.2 Infrastructure Provision and Maintenance .................................................. 3 2.1.3 Rail Consultancy......................................................................................... 3 2.1.4 Rail System Suppliers & Integrators........................................................... 3 2.1.5 Rail Transport Operators............................................................................. 3

2.2 Rail Industry SWOT Analysis ............................................................................ 3 3 Objectives ................................................................................................................... 3

3.1.1 Skills recruitment and retention .................................................................. 3 3.1.2 Improving Industry Competitiveness.......................................................... 3 3.1.3 Promoting Research, Technology & Innovation and Improving Take-Up. 3 3.1.4 Promoting Collaborative agreements, Networks & Enterprise................... 3 3.1.5 Promote and Develop the Capability in the West Midlands....................... 3

4 Action Programme...................................................................................................... 3 4.1 Summary Action Programme ............................................................................. 3 4.2 General Rail Cluster Activities ........................................................................... 3 4.3 Skills Recruitment and Retention ....................................................................... 3 4.4 Improving Industry Competitiveness.................................................................. 3 4.5 Promoting Research, Technology & Innovation and Improving Take-Up......... 3 4.6 Promoting Collaborative agreements, Networks & Enterprise........................... 3 4.7 Promote and Develop the Capability in the West Midlands............................... 3

5 Measurement of Whole Programme ........................................................................... 3 6 Appendix 2: List of Proposed Projects and Initiatives 2005/08 ................................. 3


________________________________________________________________________ April 2005 of 27

Executive Summary The West Midlands is at the hub of the UK rail network and the rail cluster includes businesses active in all aspects of rail services in the UK and global markets. Its unique points include a presence in depth of globally significant rail consultancies and service providers, a national centre for rail systems development, significant maintenance and infrastructure companies as well as a world-class component supply base feeding rolling stock and infrastructure industries. It suffers from the problems of fragmentation caused by privatisation, a risk and technology-averse culture and a severely ageing demographic. To fuel development these factors need to be addressed to coalesce the cluster to extract maximum benefit from key future investment in rail nationally and globally. This plan intends to capitalise upon the unique experience gleaned from being the first nation to privatise its’ rail industry. The lessons learnt making this operate successfully are vital to numerous other nations seeking to follow this path. The plan is an ambitious yet focussed programme designed to capitalise upon proven strengths and expertise whilst augmenting the industry base with technology, skills, strong networks and opportunity. The programme plans for a total spend of £6,003k over 3 years and seeks £2,873k of AWM funding (plus £285k of ERDF cluster funding) to facilitate this. The plan presents a direction borne from a robust vision less likely to be diluted and disturbed by outside influences and initiatives of limited potential. The support will deliver key projects including:

• A focussed Rail business alliance to represent and promote the industry and cut through barriers to build an industry fit to reach its full potential

• A strong technology and industry ‘heart’ pulling together research, development support and entrepreneurial spirit via technology transfer between research establishments and industry

• An integrated International business development programme with quality and appropriate support

• A comprehensive skills programme with quality provision to track the industry as it progresses and develops

This plan reflects an industry-supported and Rail-focussed developmental programme. It is ambitious in its aims but realistic in its size and represents best regional thinking based on industrial value for money measures. David Johns Rail Cluster Chair April 2005


________________________________________________________________________ April 2005 of 27

1 Vision Statement The purpose of the 3-year plan for the West Midlands Rail Industry is to document identified areas of strategic support to generate increased economic activity. This is summarised by the following vision:

To achieve recognition that the West Midlands is the place that really understands and can deliver innovation and change within

global Rail markets. This vision is developed from identified areas of opportunity and support that should give tangible benefit to the Rail industry of the West Midlands. It is not based upon a far-reaching aim to see increased levels of business or business at higher levels of added value across all areas but has been drawn from areas of best value intervention based upon realistic support levels and a finite budget. The vision does NOT encompass broad brush support for areas of activity that are suffering through global market pressures but have already had chance and opportunity to fight the threat. It is a sad fact that the business base will change and this vision does not seek to interfere in the business pressures that drive a commercial market.

1.1 Vision Discussion In developing the vision, recognition has been made of what makes the Rail cluster in the West Midlands unique, its areas of strength and what is developable. The industry is unique globally and some of its strengths come from the expertise gained in arriving at the position it is in today. These strengths can be broadly identified as follows:

• Privatisation. The UK industry is one of the few national Rail industries that has been privatised and many other nations are keen to follow some form of this model. Significant experience has been gained from the, at times, difficult exercise undertaken in the UK but this expertise is valuable as other nations draw up plans to follow suite. The general movement of skills and expertise from the public sector to the private sector is an enormous shift in business profile and is one which regional companies have been through and have skill and experience to share.

• Commerciality. The privatised industry has had to face life in the commercial world and to learn to operate profitably and understand the true value of trapped intellectual property in a large and disparate industry. Moreover, structural business changes as well as new interfaces to manage have presented themselves which are relevant and transportable into other markets and industries.

• Expertise. A strong rail consultancy base has developed, particularly in the region, as old nationalised skills were unlocked. In some cases these were absorbed into diversifying consultancies from other industries whilst in others


________________________________________________________________________ April 2005 of 27

specialised rail companies have been set up. This base is uniquely equipped to capitalise upon the above experience in globally developing rail markets as well as new markets receptive to this broad expertise.

• Customer focus. The privatised industry has applied principles of customer care and responsibility across all areas from point of traveller interface through to multi-layered contracting within the industry. These principles once more have great relevance and importance as they have been learned in difficult periods of change.

• New approach to infrastructure maintenance. The heavily congested UK rail network has necessitated a customer-friendly yet cost-effective approach to maintenance and renewal works. These are typically well publicised, efficient and demand high levels of planning, preparation, co-operation and negotiation and often occur at unsociable times or in large, complex works. This approach has been driven by and in conjunction with the rail franchise operators as a result of privatisation and has particular roots in the region due to unique pressures on the regions railway infrastructure.

• Partnerships. The large scale upgrading works necessitated post-privatisation have been captured mainly by large consortia and joint venture partnerships. The development of networking and complimentary skills as a by-product of these new business arrangements leaves a part of the industry well placed to build upon these relationships and spread the expertise wider.

• Opportunity. The recently published rail review has cited significantly increased volumes of work needed under Network Rail particularly in the West Midlands area. This increase is to be significantly offset by cost-efficiencies which could provide significant opportunity for the regional rail industry to take forward its lessons and experience and combine them with others to deliver against this requirement and onward.

• RRUK. The Rail Research UK facility located at Birmingham University is a logical centre for a significant part of the regional rail industry. It is recognised internationally through the formation of Eur2Ex and a hub such as this can be used to capitalise upon attendant opportunities.

• Component manufacture. Although train assembly activity is reducing in the Region its long existence at the heart of UK rolling stock design and manufacture has created a highly innovative, flexible and experienced supply chain for components that are in demand throughout the world based on proven quality and high technology manufacturing.

• Rolling stock maintenance. The outsourcing of rolling stock maintenance by many Train operators since privatisation has created major opportunity for the private sector led by the train manufacturers to extend their scope of activities. This includes advanced technology, diagnostics and remote condition monitoring which are needed around the world.

Several themes run through the above listing, the strongest of which being experience, opportunity and change and it is upon these pillars that the vision is built.


________________________________________________________________________ April 2005 of 27

1.2 The Vision Explained In order to clarify and knit together the thematic strands of this 3-year plan, the vision of impact and effect of this plan is presented graphically below.

The first task is to improve the perception of the industry within the region, both as a capable industry in its own right, as well as an attractive proposition to outsiders. The goal is to promote the ‘completeness’ of the industry and the opportunities for capturing business in new ways. We will also seek highlight the potential for ‘marriages’ to meet and generate these opportunities from within the regional capability and identify career potential within the industry. Once this perception has been achieved, we will seek to bind the (currently quite fragmented) industry together by establishing a sense of camaraderie and a desire to support. This will be effected by networking and facilitation and a logical ‘heart’ or home around which this can be delivered. The initial support of a sustainable trade business association will be at the core of this delivery, the existence of which will act as a conduit for activities thus facilitating a strong direction for delivery against this and future visions.

Study Publicise Broker Understand Identify

Develop industry perception

Bind industry together

Grow and shift to higher GVA

Exploit to its’ full potential

Sense of camaraderie Desire to support Logical ‘heart’ Facilitation Business alliance Relationships Skills development

Technology, business & skills support Joint ventures New markets New products

Collective efforts Case studies Support Togetherness Dynamic

3 YEAR PLAN


________________________________________________________________________ April 2005 of 27

This more aligned and substantially less fragmented industry will then be supported to develop and shift into higher value-added areas with increasing levels of technology, business and skills support. It is envisaged that the industry will be in a better position to supply new products and new markets capitalising upon this support. Higher education establishments will be involved in the delivery of training relevant to the industry. Finally the increased business potential must ensure its momentum does not stall and instead go on to greater things founded upon the principles of support and togetherness. This more dynamic industry should market its achievements to fuel its abilities via case studies and publicity around the benefits of collective efforts. Areas of support will be judged against this vision via stated actions and projects flowing from them. If a project application is made in support of this action plan then it will be tested against this vision for eligibility.


________________________________________________________________________ April 2005 of 27

2 Summary Cluster Analysis The size and issues facing the Rail Industry cluster within the West Midlands is wholly dependent upon the nature of the definition used for the Rail industry cluster. The definition developed by the COG is: ‘Provision and maintenance of services, goods or infrastructure for the transportation of passengers or freight by rolling stock”. This gives a wide industry scope that reflects the diversity of Rail-related activity based in the West Midlands. To assist in the analysis and categorisation of this let us break down this industry definition into discrete areas of interrelated activity:

• Rolling Stock and supporting industries. • Infrastructure provision and maintenance • Rail consultancy • Rail systems suppliers and integrators • Rail transport operators

There are of course areas of overlap across two or more of these but the breakdown can be considered valid if traditional sectoral links and drivers are taken into account. For example, Rail consultancy may be on an upward cycle regionally due to its’ position in the global market and the buoyancy of global demand whereas Rolling Stock assembly regionally is in decline. The industry in the West Midlands has strengths in the traditional areas of manufacturing although it is not well represented in the global supply chains of modular rail components. Rolling stock assembly of passenger trains has ceased at the Alstom Birmingham plant but the site will continue with maintenance, renovation and aftermarket activities. Freight vehicles are made by Marcroft Engineering in Stoke and a number of other major tier 1 rolling stock suppliers are located in the region. A number of key infrastructure supply and maintenance companies are also here including Birse, Carillion, First and Mowlem. System suppliers are represented by Marconi, Siemens, Ultra, ABB Power and several others. There is also a significant presence of almost all the ‘top’ rail consultancies located in and around the Birmingham area including AEA, Arup, Atkins, Frazer Nash, Faber Maunsell, Owen Williams and Scott Wilson. Train operating companies including Virgin and Central are located regionally as well as a number of key suppliers into the broader operating agenda. Network Rail’s London and North Western territory offices are also located in Birmingham. A geographical representation of the regional industry is shown below (source AWM rail database).


________________________________________________________________________ April 2005 of 27

Infrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenanceInfrastructure provision & maintenance

Rail consultancy & designRail consultancy & designRail consultancy & designRail consultancy & designRail consultancy & designRail consultancy & designRail consultancy & designRail consultancy & designRail consultancy & design

Rail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integratorsRail systems, supplier & integrators

Rolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industriesRolling Stock & support industries

Symbol KeySymbol KeySymbol KeySymbol KeySymbol KeySymbol KeySymbol KeySymbol KeySymbol Key

OtherOtherOtherOtherOtherOtherOtherOtherOther

M42

M5

Burton upon TrentBurton upon TrentBurton upon TrentBurton upon TrentBurton upon TrentBurton upon TrentBurton upon TrentBurton upon TrentBurton upon Trent

StaffordStaffordStaffordStaffordStaffordStaffordStaffordStaffordStafford

DudleyDudleyDudleyDudleyDudleyDudleyDudleyDudleyDudleyBIRMINGHAMBIRMINGHAMBIRMINGHAMBIRMINGHAMBIRMINGHAMBIRMINGHAMBIRMINGHAMBIRMINGHAMBIRMINGHAM

WalsallWalsallWalsallWalsallWalsallWalsallWalsallWalsallWalsall

SolihullSolihullSolihullSolihullSolihullSolihullSolihullSolihullSolihull

RedditchRedditchRedditchRedditchRedditchRedditchRedditchRedditchRedditchWarwickWarwickWarwickWarwickWarwickWarwickWarwickWarwickWarwick

WolverhamptonWolverhamptonWolverhamptonWolverhamptonWolverhamptonWolverhamptonWolverhamptonWolverhamptonWolverhampton

WorcesterWorcesterWorcesterWorcesterWorcesterWorcesterWorcesterWorcesterWorcester

CoventryCoventryCoventryCoventryCoventryCoventryCoventryCoventryCoventry

TamworthTamworthTamworthTamworthTamworthTamworthTamworthTamworthTamworth

TelfordTelfordTelfordTelfordTelfordTelfordTelfordTelfordTelfordShrewsburyShrewsburyShrewsburyShrewsburyShrewsburyShrewsburyShrewsburyShrewsburyShrewsbury

Stoke-on-TrentStoke-on-TrentStoke-on-TrentStoke-on-TrentStoke-on-TrentStoke-on-TrentStoke-on-TrentStoke-on-TrentStoke-on-Trent

HerefordHerefordHerefordHerefordHerefordHerefordHerefordHerefordHereford

Ross-on-WyeRoss-on-WyeRoss-on-WyeRoss-on-WyeRoss-on-WyeRoss-on-WyeRoss-on-WyeRoss-on-WyeRoss-on-Wye

M1

M40

M6

M69

M45

M54

M50

LudlowLudlowLudlowLudlowLudlowLudlowLudlowLudlowLudlow

2.1 Regional Industry Explained For the purpose of assessment and derivation of strategic actions the Regional Rail Industry will be looked at in terms of these five key areas.

2.1.1 Rolling Stock and Supporting Industries Rolling Stock manufacture is a global industry with modular train and vehicle components supplied from dedicated, multinational company facilities around Europe and the world. These form strong and well developed global supply chains and, other than through mergers and acquisitions, will only be reshaped by change in strategies by the leading multinational manufacturers. Rolling Stock manufacture in the UK has been very busy up to recent times with a peak of work following urgently needed replacement of old Rail vehicles post-privatisation under the franchise awards to Train Operating Companies (TOC’s). Where franchises have not been awarded for sufficiently long duration to permit sufficient investment return for the TOC’s, major train leasing companies have purchased to lease back to the TOC’s. As such limited demand for new vehicles exists (compared to the high levels of replacement seen over the last five years) and further rationalisation and consolidation of the facilities present within the UK is likely. This has been demonstrated by the decision of Alstom to cease train assembly at the Washwood Heath facility in Birmingham. The


________________________________________________________________________ April 2005 of 27

expertise centred on this facility, however, is being used to support new international markets as joint ventures and increased local content becomes increasingly commonplace in these markets. Alstom will likely continue with some form of Train maintenance activities which are also carried out by Bombardier on Virgin trains at the Burton on Trent facility. Supporting industries have been affected in the wake of Rolling Stock changes but retain some input into global supply chains as well as the significant maintenance, overhaul, repair and modernisation work necessary to keep the heavily utilised UK rail fleet in shape. This is increasingly important under the franchise model as incomes are dependant upon passenger numbers and unappealing and old-fashioned rolling stock, once an industry by-word, is being significantly overturned by the commercially driven franchisees keen to deliver a cohesive and attractive service proposition. Not withstanding the cessation of assembly at Alstom, Washwood Heath, the West Midlands remains a significant home to the rolling stock industry. The presence of several global organisations and specialised SME’s has produced a well-regarded and capable supply base. Areas of specialism include suburban multiple units, metro trains, loco-hauled passenger coaches, electrical propulsion equipment, pneumatic control equipment, compression joints and valves with unique ‘Radial’ fitment. The cyclical nature of the rolling stock industry has made investment levels and future demand levels difficult to predict. However, analysis back up by industry insiders have estimated demand for 2000 vehicles by 2010 and explained recent moves by rolling stock organisations in the West Midlands to restructure their UK capacity.

2.1.2 Infrastructure Provision and Maintenance Significant investment has taken place on the UK infrastructure, predominantly since the privatisation of the industry. Probably the best known example is the upgrading of the West Coast main line which is the single largest rail upgrading work ever carried out in the UK. The need for such intensive upgrading works has arisen from under-investment by successive governments and the attendant degradation of infrastructure. Fortunately this trend has been arrested via change of political will and the recognition of the crucial role for rail passenger and freight transport in the increasingly congested National transport network. National infrastructure maintenance is under a period of significant change. It has been carried out by multi-level subcontractors under the control of Network Rail but now all maintenance activity has been returned to direct in-house control. Route improvements will continue to be carried out by consortia or joint ventures involving Network Rail and the main prime contracting and consultancy base but strategic development of major projects will now be under Governmental control. In all cases the industry has developed in a partnership working fashion and has developed effective ways of working in a newly-privatised arena. The unique skills that


________________________________________________________________________ April 2005 of 27

have been developed include consortia and joint-venture working, PFI, customer-focussed working (the UK has developed great expertise in out-of-hours improvement works, efficient use of route closure, effective maintenance and improvement works procedures and quality communication to a challenging public base) and very different means of operating in an entrepreneurial and profitable way. The West Midlands infrastructure industry currently finds itself at an important junction. Capable of providing specialist support in rail maintenance, infrastructure management, infrastructure components, industrial plant equipment and contracting. Significant overseas opportunities are becoming increasingly attractive against an uncertain domestic market but this has to be offset against significant planned increase in UK Rail spend. This will be driven by volume increase and efficiency gains and will likely generate significant opportunity for well-qualified industry capable of servicing this. Europe currently tops the overseas rail infrastructure investment league with projects estimated at £195 billion due for delivery up to 2009. The Asia-Pacific region follows closely with investments estimated at $164 billion. Such markets represent appealing alternatives to the UK market.

2.1.3 Rail Consultancy The unparalleled expertise gained from the privatisation of Britain’s Rail network has significantly increased the global demand for consultancy services. Now recognised as the global leaders on restructuring, re-equipping and modernisation, the wave of international privatisation coupled with de-regulation has greatly extended British consultancy involvement in rail projects worldwide. Acknowledged as being at the forefront of facilities management, operational support, feasibility studies and construction and project management, opportunities for British consultancy is at all time high. Rail global investment from 2001-2010 is estimated at $700 billion. Infrastructure projects underway and due for completion by 2009 are worth $450 billion. Such figures represent significant opportunities for consultancies and expansion into new markets. Over and above these international markets, the domestic market has remained buoyant for rail consultancy. Privatisation has produced a more commercially aware and Key Performance Indicator driven industry that relies heavily upon the expertise of consultancy. The West Midlands is home to around twenty consultancy organisations capable of providing a range of consultancy services. In particular, specialism is available on design, engineering, planning management, information systems, safety and risk management including verification/validation and project management.


________________________________________________________________________ April 2005 of 27

2.1.4 Rail System Suppliers & Integrators Post-privatisation, the role of system suppliers and integrators has significantly altered. The gap in expertise left by the ending of British Rail has enabled suppliers to move up the value chains and they are now acting more as intermediaries capable of providing a ‘complete package’. The industry has become reliant on them in the design, building, installation and servicing of automation systems. The use of outsourcing to experienced integrators or suppliers is now an acknowledged way of saving time with a productive cost-effective solution. The introduction of stricter technical and quality control requirements by relevant British and global Standards, Railway Group Standards and Network Rail Company standards has added to this reliance. In the post-privatised era, available trade statistics infer that the home market is still buoyant for rail system suppliers and integrators. It will account for 30% of the Strategic Rail Authorities (SRA’s) £54 billion operating and renewals 2003-2012 budget plan. The export market for UK suppliers and integrators during 1996-2003 was worth £134 million and statistics suggest this figure will continue to rise. For the West Midlands and its rail system suppliers and integrators, this represents considerable opportunities. Specialism exist in communication systems, services for the light rail, metro and heavy rail sectors, signalling equipment, DC substation systems and equipment and control systems through the presence of around ten global organisations and a selection of SMEs.

2.1.5 Rail Transport Operators As the hub of many of the key rail north-south and cross-country rail routes, the West Midlands is home to several major Train Operating Companies (TOC’s) with many more using these routes. In addition, major Freight Operating Companies (FOC’s) also use the routes or are based in the region. Nationally there are 23 Train Operating Companies (TOC’s) operating passenger service franchises let by the Strategic Rail Authority (SRA). The Government Transport White Paper, issued in July , outlined important changes to the way these franchises will be managed in the future which will affect the region. The SRA is to be wound up and the Government will take a more direct role. There will be fewer passenger service franchises and these will be aligned more closely with Network Rail’s new regional structure. These changes will take some time to implement and the SRA will continue to manage the franchises in the interim. Subject to renewal of franchise agreements, the TOC’s have significant plans for the improvement of services they offer to customers including new and re-furbished stations, continual improvements in rolling stock, continuing improvements in service frequency and reliability to encourage greater use of trains. Virgin Trains, based in Birmingham,


________________________________________________________________________ April 2005 of 27

have major plans for all the stations they currently manage on the West Coast Main line. Also their noteworthy cross-country service franchise has recently been rejected by the SRA which has received a mixed response from the industry. Chiltern Railways, although not based in the region, operate from West Midlands stations and have aspirations to secure the Central Trains franchise and, if successful, would involve major improvements to infrastructure. The TOC’s do not own their own rolling stock and instead lease it from the three main Rolling Stock Companies (ROSCO’s): Angel Trains, HSBC Rail and Porterbrook. Needless to say, these financial leasing bodies carry significant weight within the industry as they finance all purchases, repairs and upgrading works on rolling stock. The FOCss are constantly seeking to increase business in line with Government transport strategy and severe congestion on the existing network is creating pressure to re-open disused lines for freight and modify existing layouts to provide alternative routes. In addition businesses that rely heavily on road haulage of heavy bulk materials are seeking opportunities to create rail based handling facilities from which short distance road haulage can carry out local distribution. These activities represent real opportunities for West Midland rail businesses.


________________________________________________________________________ April 2005 of 27

2.2 Rail Industry SWOT Analysis

Strengths: • Accessibility and experience of international

markets. • Strong presence of multinational

organisations within the region. • Strong Engineering Consultancy base with

international reputation. • Expertise across all rail sectors. • Considerable experience of privatisation. • Recognised regime of strict standards. • Well-established network of professional

rail support companies offering specialist services.

• Rail Research UK at the University of Birmingham.

• A broad and flexible manufacturing base and supply chains.

Weaknesses: • The fragmentation of the rolling stock

supply chains compared with automotive and aerospace.

• Attraction and retention of new-entrants a problem.

• A shrinking manufacturing base. • Access to testing and understanding of rail

standards. • Poor industry perception among school

leavers and media. • Lack of cohesion and co-operation within

the supply chain. • Strict UK standards.

Opportunities: • Identify and develop new markets where the

design, engineering and support for products and services is critical.

• Increasing privatisation within the global environment.

• An expanding global transport market. • Strategic sourcing offering international

contracts. • Collaborative working to increase value

added. • Moving to open dialogue based focus on

risk management/mitigation rather than managing problems after the occurrence.

• Educating on the importance of process alignment and management.

• Supply chain development through networks to develop skills, improve quality and encourage investment.

• Greater use of other transport technologies on rail, e.g. telematics, remote diagnostics, condition monitoring etc.

• Increase in infrastructure budget in the UK.

Threats: • Increased competition from overseas

suppliers. • Low cost of substitute product in the value

chain. • Uncertainty over new developments and

Governmental policy. • Treasury concerns over the cost structure of

UK Railways. Currently estimated as under-funded by £6-7 billion.

• Short-termism associated with lack of long-term franchises.

• Emerging International markets are maximising local content and developing own capability.

• Lack of clarity throughout the industry about ‘the future’.


________________________________________________________________________ April 2005 of 27

3 Objectives Below is a developed listing of key objectives which will go some way to deliver the stated vision for rail. These are based upon basic mapping work that has been carried out on behalf of the cluster but will require updating particularly in view of the extreme volatility being experienced by the industry as a result of political restructuring and increasing political intervention. This is required to strengthen the case for support and to underpin the strategic actions. These objectives will address the SWOT analysis and take forward the strong regional strengths that exist and/or may be developed for economic benefit. They can be listed as follows:

• Skills recruitment and retention • Improving industry competitiveness • Promoting research, technology & innovation and improving take-up • Promoting collaborative agreements, networks & enterprise • Developing a recognition of the capability in the West Midlands

These have been identified from industry sources supported by research, debate and targeted strategy meetings. They do not reflect an over-general strategy as rail is a constrained industry unless one has the benefit of unlimited funding, influence over regional procurement, planning freedom, legislative control and a large latent customer demand. Regrettably most of these are outside regional influence and Government has a wider balancing act to pursue that, whilst being supportive of rail, is finite in its commitment. Accordingly we are faced with objectives that have the potential to drive forward change and opportunity within these sectors of the industry. As a cross-cutting theme, it is envisaged that sectors within the regional industry collective can draw other sectors into increased activity and opportunity to achieve wider penetration. These objectives detail areas of activity to meet the vision and have been broken down under the areas identified above and include the cross-cutting objective of keeping updated a comprehensive mapping exercise for industry and skills serving to underpin and focus and align activities. These are listed separately in the action plan but specific objectives are as follows:


________________________________________________________________________ April 2005 of 27

3.1.1 Skills recruitment and retention Skills shortages and gaps have been identified by the Rail industry at National level and these, underpinned by regional issues, are hampering the growth of the rail cluster in the West Midlands. Anecdotal information suggests that the Industry has an ageing demographic profile exacerbated by the significant and unique shortage of Managerial, Engineering and Technician level skills in the 30-50 years age band. This needs further study and assessment in regard to the future employment profile of the cluster to identify critical skills shortages and gaps preventing key development. Difficulties being experienced with recruitment and retention of new entrants may be addressed by improving the image of the cluster through appropriate engagement with young people, their teachers, careers advisers and parents and it is vital to identify progression routes and career development paths, including membership of appropriate professional bodies. There is also a need to ensure that staff at all levels within organisations and their supply chains are equipped with skills to compete in the global market.

Attracting entrants of the future by improving the unappealing perception of the industry

Increase recruitment of new-entrants including apprentice and graduate level and support their retention via progression routes

Maintain skill levels of existing staff to world class standards in the global market and deliver targeted courses supported by and involving industry

Ensure skills track and keep pace with changes and innovations commensurate with higher GVA activities sought by this strategy

Leadership and Management development

3.1.2 Improving Industry Competitiveness To ensure that Industry remains competitive and in a position to capitalise upon opportunities in an increasingly global market as well as one experiencing competition from diversified and developed best-practice competitors the strategic objectives below have been set.

Introduce a targeted supply chain development programme Benchmarking and adopting best practice exchange from other industries Develop explicit training support to implement best practice Maximising the support of regional industry via existing competitiveness-oriented

programmes, mentoring and guidance schemes

3.1.3 Promoting Research, Technology & Innovation and Improving Take-Up


________________________________________________________________________ April 2005 of 27

To promote industry linkages with the research base to create opportunity in higher value-added areas of activity to facilitate diversification into new markets and business areas as well as to augment the offer pre-existing in current markets the objectives below have been set.

Identify key strategic technology areas and current strengths/weaknesses Facilitate technology transfer activities from the research/HEI base into industry

and vice-versa in key technologies Maximising take-up of other and pre-existing relevant support schemes Focus current activities to attain critical mass and attaining recognition as a centre

of excellence Actively promote involvement with the research and technology base within the

cluster particularly in areas of industry leadership

3.1.4 Promoting Collaborative agreements, Networks & Enterprise The benefit of companies working together and supplementing their respective offers as well as developing their business base has implications on costs as well the sophistication and relevance of the offer. This may include developments ‘up’ the supply chain as has been seen in many other markets. The following are the stated objectives to achieve this.

Support the development of sustainable Rail clustering activity through wide participation, match-making and ‘model’ agreements

Support business opportunities in Regional, National and International markets and to encourage diversification into new business areas

Facilitate support for regional opportunities from regional development and the business development potential it brings

Develop effective industry intelligence exchange

3.1.5 Promote and Develop the Capability in the West Midlands The regional capability is a ‘well-kept secret and the overturning of this perception will allow greater activity and opportunity to present itself. As such recognising the regional capability underpins a significant part of this strategy and the objectives to achieve this are as follows.

Promote and develop a greater understanding of regional capabilities through a comprehensive plan of activities

Develop industrial networks including non-usual participants Capitalise upon this increased recognition through activity within and outside the

region


________________________________________________________________________ April 2005 of 27

4 Action Programme The following strategic actions have been developed to deliver against the stated strategic objectives. They are shown in the accompanying tables against each of these objectives. The business case and outputs for each one is shown as well as proposed timescales and likely participants. It is imperative that synergy with existing provision is considered to avoid duplication and to maximise benefit and this has been identified accordingly. To quantify the impact of each project, measurement against Rail cluster-specific and strategically defined Key Performance Indicators (KPI’s) has been assessed in view of the overall 3-year plan.

4.1 Summary Action Programme The table below is a summary of the indicative spend associated with this plan

Total Spend

AWM Spend V.F.M. Title of project or initiative Lead Partner

2005/08 2005/08 2005/06 Y/S Existing Projects There are no major projects currently contracted

Proposed Projects Business alliance initiatives RBA £875k £720k £256k S Business opportunity initiatives RBA £780k £580k £85k Y Business support initiatives RIA £1,363k £810k £220k Y Technology support activities RRUK £545k £475k £130k S Skills development programme LSC £2,510k £358k £0k Y Total Proposed Projects £6,073k £2,943 £691 Reserve Projects Skills development additional activities

LSC £1,258k £298k £100k Y

Total Reserve Projects* £1,258k £298k £100k *Reserve Projects will only go ahead if funded by agencies other than AWM, or if they substitute activity in the original cluster plan and therefore can be achieved with the original budget. The following tables show a more detailed breakdown of objectives and specific actions planned broken down by objective areas. Note that some projects may fall within ‘reserve’ status and others are subject to phased delivery of linked initiatives.

Transport Technologies Rail COG 3-Year Plan ____________________________________________________________________________________________

____________________________________________________________________________________________________________ April 2005 of 27

4.2 General Rail Cluster Activities Objective Action/project scope Potential Partners

Complete an up to date and comprehensive Rail industry mapping exercise

Complete new mapping exercise aligned to current Rail cluster definition and incorporating recent Network Rail and Governmental changes to structure of Rail industry

AWM

Provide public-sector and partner understanding and alignment of policy to accommodate the needs of rail cluster development

Publicise, inform, align and promote Rail cluster needs, opportunities and uniqueness via paid officials work, maintenance of policy work and close involvement with public-sector policy bodies and delivery organisations

AWM, LSC, B’Link, HEI’s, GO-WM, LGA, RIA

Skills profiling of the Cluster Map available training provision, training need and current trends. Establish current skill gaps and shortages across the cluster. Establish the workforce profile of the cluster. Publish findings through trade association and other partner bodies

LSC, Rail Research UK, RIA


____________________________________________________________________________________________________________ April 2005 of 27

4.3 Skills Recruitment and Retention Objective Action/project scope Potential Partners

Attracting entrants of the future by improving the unappealing perception of the industry

Youth Summits/Schools Visits/Setpoint Programmes to promote the industry with appropriate role models, progression Routes (the Rail Pathway to Excellence) and case studies.

LSC, AWM, CPE, IMechE, Connexions, Aim Higher, CRAC

Increase recruitment of new-entrants including apprentice and graduate level and support their retention via progression routes

Supply Chain Apprenticeships. Work Experience for Undergraduates. Graduate Apprenticeships. Graduate Fairs to publicise career opportunities. Defining the progression routes. Bursaries. Mature Apprenticeships

LSC, HEI’s, Graduate Advantage, Student Advantage

Maintain skill levels of existing staff to world class standards in the global market and deliver targeted courses supported by and involving industry

Involving employers in development and delivery of training, including Foundation Degrees Accreditation and new frameworks for training provision - allowing progression and diversification. Widening Access/Participation to training provision.

LSC, HEI’s, FEI’s, Trade Unions, C4RS, Professional Institutions Network Rail, RRUK

Ensure skills track and keep pace with changes and innovations commensurate with higher GVA activities sought by this strategy

Basic Skills Awareness Raising & Development Language and Cultural Training (Cross-Cluster Project) Impact of greater use of ICT & Electronics.

LSC, HEI’s, C4RS, Professional Institutions, RIA, Basic Skills Agency

Leadership and Management development

Leadership and Management Skills, focused on competency-based skills and Institute of Leadership and Management/Directors qualifications.

LSC, B’Link, Professional Institutions


____________________________________________________________________________________________________________ April 2005 of 27

4.4 Improving Industry Competitiveness Objective Action/project scope Potential Partners

Rail supply-chain improvement programme.

B’Link, RBA, Accelerate, MAS, WMG, MAA, RIA

Introduce a targeted supply chain development programme

Facilitating grant aid support RBA, B’Link Industrial benchmarking scheme MAS

RBA, B’Link Trade forum for sharing experiences from Automotive, Aero etc. Accelerate, RBA

Benchmarking and adopting best practice exchange from other industries

Industrial mentoring scheme RBA, RIA Develop explicit training support to implement best practice

Training programme to include safety, project management, low volume and commercial projects.

LSC, RBA

Key relationships and development programme. Signposting and helping

AWM, B’Link, RBA Maximising the support of regional industry via existing competitiveness-oriented programmes, mentoring and guidance schemes

Promote existing support- SFI, Access to Finance RBA, B’Link


____________________________________________________________________________________________________________ April 2005 of 27

4.5 Promoting Research, Technology & Innovation and Improving Take-Up Objective Action/project scope Potential Partners

Identify key strategic technology areas and current strengths/weaknesses

Map and categorise activities and facilities open for use, available commercially and potentially of benefit for developments

RRUK, Major Co’s, RBA, EUR2EX, IMechE

Augment existing provision via technology-translation support esp. Universities-Industry

RRUK, Major Co’s, RBA, EUR2EX, IMechE

Facilitate technology transfer activities from the research/HE base into industry and vice-versa in key technologies

Target uninvolved thru Business alliance marketing RBA, RRUK

Maximising take-up of other and pre-existing relevant support schemes

Information compiling via single point, brokering and signposting RBA

Capitalise on RRUK- become C of E hub for activities based upon Rail technology. Widen facilities and participation, provide co-location for delivery partners. Strengthen communication links to new potential partners.

RRUK, EUR2EX, RBA, RIA, IMechE

Focus current activities to attain critical mass and attaining recognition as a centre of excellence

Exploit European/Global leverage this exerts via publicity and activities RRUK, EUR2EX, RBA Write into Business alliance constitution to effect more technological approach to Rail business activities

RBA, RIA Actively promote involvement with the research and technology base within the cluster particularly in areas of industry leadership

Develop and implement a marketing strategy via the business alliance RBA, RIA


____________________________________________________________________________________________________________ April 2005 of 27

4.6 Promoting Collaborative agreements, Networks & Enterprise Objective Action/project scope Potential Partners

Pump-prime the formation of a rail business alliance (RBA) with wide brief and strong cross-cutting agenda. Initial funding to be for 3 years with phased, increasing support from private sector and a sustainable focus. This to have links to and act as focus for majority of Rail-related activities in the region.

RBA, RIA, DRF, ATOC, Major Rail Co’s, etc.

Facilitate strong links with existing service providers (UKTI, B’Links, MAS...)

RBA, UKTI, B’Link, MAS

Deliver a programme of Regional events Business-focussed of opportunities, developments and rail-related activities

RBA, UKTI,

Develop a suite of best-practice exchange/case study marketing materials to augment business support activities

RBA, MAS, B’Link, Accelerate, MAA

Support the development of sustainable Rail clustering activity through wide participation, match-making and ‘model’ agreements

Communicate and involve all relevant organisations to ensure Regional body fits to other Regions/National activities

RBA, RIA, DRF

Support a programme of exposure to new opportunities and new markets. This to include introduction and continued support via signposting and direct help.

UKTI, RBA, RIA

Promote Regional/Major projects via supply package development eg. Consultancy + Manufacture +… maximising local content, benefit and cohesive support

RBA, B’Link, Job Centre +, WMLGA, Regional Assembly, CENTRO

Support business opportunities in Regional, National and International markets and to encourage diversification into new business areas

Pilot activities of process support for test, certification and safety acceptance activities via information support, mentoring and signposting. Study effectiveness and value potential for additional possible future support.

RBA, B’Link, RIA

Facilitate support for regional Pilot activities of tender and contract support via information support, RBA, B’Link, RIA


____________________________________________________________________________________________________________ April 2005 of 27

opportunities from regional development and the business development potential it brings

mentoring and signposting. Study effectiveness and value potential for additional possible future support.

Develop effective industry intelligence exchange

Facilitate quality yet controlled information exchange via business alliance.

RBA, RIA


____________________________________________________________________________________________________________ April 2005 of 27

4.7 Promote and Develop the Capability in the West Midlands Objective Action/project scope Potential Partners

Promote and develop a greater understanding of regional capabilities through a comprehensive plan of activities

Undertake a campaign of self-promotion and information dissemination to a mapped Rail industry in the Region. Deliver focus through business alliance and publicise developmental intentions.

RBA, AWM, B’Link, RIA

Develop a programme to deliver specific opportunity enhancement eg. Consultancy + design + manufacture etc. Broker unlikely marriages via business opportunity lure and targeted events.

RBA, B’Link Develop industrial networks including non-usual participants

Promote and support a Regional events programme via business alliance and other delivery partners

RBA, B’Link

Capitalise upon this increased recognition through activity within and outside the region

Support specific opportunity esp. major o’seas/new markets via joined support package facilitated by business alliance

RBA


________________________________________________________________________ April 2005 of 27

5 Measurement of Whole Programme In judging value of this plan and its success, the following Key Performance Indicators (KPIs) are set for all clusters: Number of companies active in the cluster Training Accreditations Number of Networking Events For the Rail cluster specifically, 2 key KPI’s have been agreed as a priority. These are in addition to the normal AWM tier 3 outputs, the measurement of which is aimed at monitoring effectiveness of delivery against the agency’s overriding agenda but with great overlap of purpose. The KPI’s are focused on delivering the underwritten cluster activity and are used to prioritise actions. To monitor the success of this plan these measures will be recorded and reported upon. They have been developed to directly reflect the strategic objectives of the plan and are as follows: GVA per employee This is problematic to measure directly but may include-

A top-10/benchmark methodology A before/after for companies involved in cluster programmes

Number of companies active in the cluster

This will include a measure of the number of private companies participating in cluster projects and initiatives. Companies that simply receive the results of the project should not be included in this measure.

It is envisaged KPI’s will be collected as part of any contractual agreement with delivery partners, anecdotally via cluster staff and also via a form of annual survey in conjunction with the planned Rail cluster ‘heart’. The exact methodology to be used will be decided upon by this body as and when it comes into existence. For more global measurement of effectiveness and trends within the cluster, standard DTI industrial measures need to be used. These are collected already and are well established and understood. Regrettably the standard industrial classifications (SIC codes) do not fit well to the Rail cluster as it is defined and are especially irrelevant to areas of development upon which this plan is based. However, a degree of trend analysis may be carried out and this data will be made available by AWM. Results from this will act as a reasonable back-stop to support findings from KPI-generated data more specific and attributable directly to this plan’s activities. KPI targets and project outputs are presented in a separate document.


____________________________________________________________________________________________________________ April 2005 of 27

6 Appendix 2: List of Proposed Projects and Initiatives 2005/08 Title of project or initiative Priority Lead Indicative 3 Year Costs £'000 2005/08 V.F.M.

Partner

Total Capital Revenue ERDF* PrivateOther Public Capital Revenue Total ERDF* Capital Revenue Total ERDF* Capital Revenue Total ERDF*

Yes/ Strategic

Business alliance core business activities 1 RBA 795 40 600 60 95 0 10 220 230 10 20 200 220 25 10 180 190 25 S

Business opportunity development activities 2 RBA 505 0 315 50 140 0 0 85 85 10 0 135 135 20 0 95 95 20 Y Business support activities 3 RIA, B'Link 1,240 0 745 95 400 0 0 220 220 20 0 300 300 50 0 225 225 25 YTechnology support activities 4 RRUK 500 30 410 50 10 0 10 120 130 0 10 155 165 25 10 135 145 25 SSkills development programme 5 LSC 1,777 0 0 0 265 1,512 0 0 0 0 0 0 0 0 0 0 0 0 YBusiness alliance additional activities 6 RBA 96 0 96 0 0 0 0 26 26 0 0 35 35 0 0 35 35 0 SBusiness opportunity additional activities 7 RBA 225 0 215 0 10 0 0 0 0 0 0 125 125 0 0 90 90 0 SBusiness support additional activities 8 RIA, B'Link 193 0 135 20 38 0 0 0 0 0 0 75 75 10 0 60 60 10 YTechnology support additional activities 9 RRUK 60 0 50 10 0 0 0 0 0 0 0 25 25 5 0 25 25 5 SSkills development additional activities 10 LSC 612 0 237 0 320 55 0 0 0 0 0 82 82 0 0 155 155 0 Y

Cluster Plan TOTAL 6,003 70 2,803 285 1,278 1,567 20 671 691 40 30 1,132 1,162 135 20 1,000 1,020 110

Reserve Projects**Skills development additional activities 11 LSC 1,258 0 298 0 210 750 0 100 100 0 0 100 100 0 0 100 100 0 Y

Reserve Total 1,258 0 298 0 210 750 0 100 100 0 0 100 100 0 0 100 100 0

* ERDF administered by AWM through the Cluster Action Plan only. ERDF funds are subject to availability and eligibility. (ERDF obtained directly from GOWM is counted as public match funding).

Single Pot 2005- 2008 2005/6 2006/7

AWM Cost (Single Pot + ERDF) £'000 2007/8

Single Pot Single Pot Single Pot

Transport Technologies Rail Cluster Business Plan - · PDF fileTransport Technologies Rail...

Documents

Transcript of Transport Technologies Rail Cluster Business Plan - · PDF fileTransport Technologies Rail...